The Theatre

2008-07-20

It is already almost 3 weeks ago that the World Petroleum Congress took place in Madrid, but it nevertheless warrants
some remarks about this massive and high level event.
It is a place where all the high level people come and one can meet the CEOs of most of the major IOCs and NOCs, as
well as a host of ministers of oil & gas-relevant countries, producers and consumers, as well as the heads of the
OPEC and the IEA.

It was interesting to see the shadow-boxing that took place, and sometimes it was plain street-fighting, such as what
went on between the IEA and the OPEC, and their heads Mr. Nobuo Tanaka and Mr. Abdulla El-Badri.

The theatre started with several CEO”s of IOC”s categorically denying that speculation was an important
factor in the oil-price, it was all about supply and demand, and some added that OPEC should do more and produce
more. It was interesting to see that Mr. van der Veer from Shell later specified that it was not speculation that
drove the price, it was more the fact that in the future there may be a shortage and therefore it was more down to
the “emotions” of the traders. One may ask how Mr. van der Veer would define speculation, if what he
describes is not speculation.

This was a theatre of denial of the importance of speculation. The question that arises is: why are all those people,
that should know better, and probably do, so adamantly denying what is obvious for others?

Another part of the theatre play came from OPEC, that rightly said that they were “annoyed” by the
claims and basically showed the IEA that it could not count and accused it of “lacking transparency”, as
they could simply prove their numbers and could also ask why all attention is going to OPEC, that only cover 40 % of
the market and no-one is asking why the countries/parties responsible for the other 60% aren”t doing more.

It sometime feels like a pre-meditated play of blaming, ducking responsibilities and an increasingly politicised IEA.
The play with scenario”s and projections and the expected or projected growth-percentages; in the
press-conference in which the IEA presented its projections till 2013 the question came up: is this to inform or to
confuse? Even according to OPEC the IEA isn”t very clear in what it actually wants to say, be or portray.

Of course much more went on between 4200 delegates, 600 speakers, a host of CEOs and up to 35 ministers than just the
above written. The theme of the WPC was: “A World in Transition: Delivering Energy for Sustainable
Growth” and certainly a lot of talk has been going on about this, but when basics like figures about supply and
demand are politicised and obvious developments like the rampant speculation are pushed outside of the talkable
scope, one may wonder what relevance it will have and what it will bring in the reality of a World in transition.
And: what kind of transition? Transition to what?